California severance package: Will unused PTO/vacation be paid out with job ending?

Yes, California definitely requires employers to pay out unused vacation time upon termination - it's considered earned wages. This is true regardless of whether you quit, are laid off, or your contract ends. PTO that combines sick leave and vacation might be handled differently, but pure vacation time MUST be paid out at your final rate of pay. Don't use it up - get it paid out instead. It's actually better financially since you'll be working AND getting paid for those vacation days in your final check.

when i left my last job they tried to not pay my vacation out but i called HR and mentioned california law and they fixed it right away. just make sure u get it in writing somwhere that u have 18 days saved up before ur last day!!

I went through something similar last year. In California, they HAVE to pay out vacation time regardless of company policy - it's state law. However, be careful because PTO might be different than vacation. Some companies have policies where PTO combines sick leave and vacation, and sick leave might not be required to be paid out. Also, they're required to give you your final check WITH the vacation payout on your last day if it's a layoff situation. If they don't, they can face waiting time penalties (up to 30 days of your daily wage).

When you apply for unemployment, make SURE you mention this contract ending situation during your interview. This is important because they need to know it's a layoff rather than you being fired for cause. Also, if the payroll person messes up and doesn't pay your vacation, you can file a wage claim with the California Labor Commissioner's Office. I had to do this once and got all my money plus interest!

If you're having trouble getting through to your payroll department about this, I'd recommend using Claimyr to get connected with EDD directly to understand how your severance and PTO payout will affect your unemployment claim. I was in a similar situation last year and spent DAYS trying to reach someone at EDD about how my severance would impact my benefits. Claimyr got me through to an actual person in about 15 minutes - check out their demo at https://youtu.be/JmuwXR7HA10?si=TSwYbu_GOwYzt9km or visit claimyr.com. Saved me so much frustration since they'll let you know exactly how to handle your claim with the severance and vacation payout.

I just went thru this!!!! Company tried to say they didnt have to pay out my vacation time cuz they have offices in diffrent states but i reminded them im protected by CA law. They have to pay ALL unused vacation/PTO that you've earned (but not sick time). Its in labor code section 227.3. print it out and send it to ur payroll lady when she gets back just in case!!!!

wait are you going to file for unemployment??? cuz i think severence affects when u can start getting benefits i think u cant get benefits until after severence period ends but not sure about the pto payout

One more thing to be aware of - make sure your final paystub clearly itemizes the vacation payout separately from regular wages and severance. This will be important for both tax purposes and for your EDD claim. If they lump it all together, request a corrected paystub that shows the breakdown. You'll need this documentation when applying for unemployment to show exactly what portion was severance vs. vacation payout.

if they try to not pay u the DLSE can help, its the labor commissioner and they'll make ur employer pay up plus penelties. my friend had to do this and got even more money lol

Just wanted to add that you should also check if your company has any written vacation policy in your employee handbook or contract. Even though CA law requires payout regardless, having their own policy in writing makes it even stronger if you need to push back. Also, since you mentioned they're scattered across states, make sure they understand that California's "use it or lose it" policies are actually ILLEGAL here - vacation time is considered earned wages that can never be forfeited. Document everything and don't let them try to apply some other state's rules to your situation!

Yes, California law prohibits "use it or lose it" policies completely! Even if your company has a policy about carrying over limited vacation days, they cannot forfeit any vacation time you've already earned. However, companies CAN cap how much vacation you can accrue going forward (like stopping you from earning more once you hit 1.5-2x your annual allowance), but they can never take away what you've already earned. So if you have 18 days saved up, they must pay out all 18 days regardless of any company policy. The key is that vacation time is considered "vested" wages in California - once you earn it, it's yours forever until you use it or get paid for it!

Just want to add another important point - since your contract is ending at the end of this month, make sure you get clarity on whether they're treating this as a "layoff" vs "contract completion" for EDD purposes. Sometimes companies try to classify contract endings differently, but if it's truly not being renewed due to business reasons (not your performance), it should be treated as a layoff for unemployment eligibility. Also, definitely get that vacation payout confirmation in writing BEFORE your last day - don't wait until the final paycheck to discover there's an "issue." California gives you a lot of protection here, but it's always easier to sort things out while you're still employed rather than having to file complaints afterward!

One thing I haven't seen mentioned yet - make sure to ask about the timing of your final paycheck! In California, if you're being laid off (which sounds like your situation), they're required to give you your final paycheck INCLUDING the vacation payout on your last day of work. They can't mail it to you later or make you wait for the next regular pay cycle. If they try to delay it, they owe you "waiting time penalties" which is basically one day's wages for each day they're late (up to 30 days). This is separate from the vacation payout requirement - it's about WHEN they have to pay you everything they owe. Given that your payroll person has given incorrect info before, I'd specifically ask HR to confirm they understand California's final paycheck timing requirements too!